Want to Fight Crime? Address Economic Inequality

Jan. 7 (Bloomberg) -- About noon on Christmas Day in
London, I became the victim of a crime. Somebody smashed in the
rear window of our family car; nothing serious, fortunately.

Nonetheless, it led me to the inevitable questions: Who did
it and why? Was this an impersonal act driven purely by cold
calculation? Or did the perpetrator harbor malice or resentment?

I’ll probably never know. But on the causes of crime more
generally, we do know a few things. First, seemingly trivial
factors -- the location of street lights, road layouts, housing
designs and so on -- often have a decisive influence on whether
crime hits one place rather than another. Second, and more
important, a sure recipe for more frequent crime is rising
socioeconomic inequality.

This ought to be especially worrying in the U.S. and U.K.,
where, over the past two decades, inequality has increased
tremendously.

Some influential economists, notably Nobel laureate Gary
Becker, have sought to explain crime as a simple consequence of
rational economic self-interest. At any moment, in this view,
people weigh up the potential risks and rewards of their
possible actions and decide to commit a crime whenever that
turns out to be the best option. Moral considerations of right
and wrong, trust and cooperation, have nothing to do with it.

Tidy as the theory may be, it contradicts the facts. If
crime follows purely economic calculation, then an area’s crime
rate should correlate closely with its economic conditions.
That’s just not the case.

Crime Rates

In an important study a few years ago, for example,
economists Edward Glaeser, Bruce Sacerdote and Jose Scheinkman
found that economic factors explain less than 30 percent of the
variation in crime rates among cities or among different parts
of one city.

A more persuasive theory, initiated by criminologist Marcus
Felson, focuses more on the simple physical factors that
influence where and when crime might happen. In Felson’s
“routine activity” theory, crime has a chance to take place
anytime a potential offender comes into contact with a potential
target in conditions conducive to crime -- for example, in the
absence of a third party who might intervene or witness the
event.

Police forces in the U.S., U.K. and elsewhere have used the
theory extensively in deploying their limited resources, paying
closer attention to simple details such as patterns of street
lighting and flows of people. Data show, for example, that a
house on a main street is more likely to be burgled than a house
accessible only by driving down two further side streets.

The reason appears to be that burglars spend most of their
time on routine, non-criminal activities, and when they commit
crimes, they do so in places they are most familiar with.

But this theory, which sees crime as a kind of chemical
reaction between potential offenders and targets, ignores the
question of how a person becomes a potential offender in the
first place. This is equally important.

Criminologists have long failed in efforts to identify
early on those particular youngsters who will later become
serial offenders. It seems that most criminals are made, not
born, created through social influences and a progressive
sequence of experiences and external influences.

A culture of crime in a community can make it more likely
for young people to become criminals. The behavior can spread
mechanically, more or less like an infection or chemical
reaction.

Economic Inequality

Equally decisive in determining crime rates are the more
invisible barriers to crime set up by social norms and social
cohesion. Indeed, one of the most robust statistical patterns
known is that crime rates tend to go up with rising economic
inequality, which itself tends to go along with erosion of
social trust.

In a brilliant 2009 book titled “The Spirit Level,”
researchers Richard Wilkinson and Kate Pickett reviewed hundreds
of earlier studies and presented overwhelming evidence that
economic inequality correlates directly with levels of crime and
many other measures of social dysfunction. Nations with lower
inequality have higher life expectancies, fewer homicides, lower
infant mortality, higher levels of trust, and less obesity and
addiction.

The children of poor parents in the U.S. or U.K. have a
significantly lower chance of becoming wealthy than do similar
children in countries such as Sweden, Denmark or Japan, where
people are more equal. As Wilkinson quipped, “An American who
wants to pursue the American dream should move to Denmark.”

Wilkinson and Pickett also explored the mechanisms by which
economic inequality may drive social problems. One of the
foremost is how low evaluations of social status can trigger
long-term stress. In a 2004 study, for example, psychologists
measured the levels of the stress hormone cortisol in volunteers
facing various kinds of threats.

They found much higher levels associated with “social
evaluative” threats -- the negative judgments of others. As
societies become more unequal, such judgments tend to become
implicit in social interactions, as the poor are excluded from a
wide range of activities.

Heightened cortisol levels over long periods are associated
with a variety of health risks, including high blood pressure,
weakening of the immune system, memory loss and impaired
learning. These could contribute to even greater stress and
social withdrawal.

Inequality, of course, is a natural phenomenon that no one
would sensibly hope to eradicate completely. Basic models of
financial flows and patterns of wealth aggregation indicate that
the possession of most wealth by a small fraction of the
population is a virtual certainty in any more or less free
market. (I’ve put some further detail on this matter on my
blog.) It’s what you get if you have an economy of free exchange
coupled with multiplicative returns on investment.

U.S. Prisons

Still, even if we accept inequality as a given, that
doesn’t mean we should accept it in the extreme. It’s probably
no accident that the U.S., ranked among the most unequal
nations, also has the largest fraction of its population in
prison -- five times as large as that of any other
industrialized nation (excluding Russia).

The socially destructive consequences of inequality will
become increasingly obvious unless we reduce it -- through the
tax system (as the U.S. did through much of the 20th century,
before the last few decades), or through measures aimed at
making pretax incomes more equal.

I don’t know which approach is better, just as I’ll never
know who smashed my window and why. I do see that if we opt for
the status quo, everyone’s chances of becoming a victim will be
greater.

(Mark Buchanan, a theoretical physicist and the author of
“The Social Atom: Why the Rich Get Richer, Cheaters Get Caught
and Your Neighbor Usually Looks Like You,” is a Bloomberg View
columnist. The opinions expressed are his own.)